NEW YORK (AP) _ Verizon Communications Inc. said Thursday its profit fell sharply in the fourth quarter from last year, when results were boosted by the sale of Canadian assets and a tax gain.
The New York-based telephone company said it earned $1.7 billion, or 59 cents per share, in the last three months of 2005, down from $3 billion, or $1.08 a share, a year ago.
Earnings were reduced by $59 million, or 2 cents per share, to reflect the freezing of its management retirement plan, which was announced in December. The company said the move would cut costs by $3 billion over 10 years.
A voluntary severance program for union employees cut $36 million, or 1 cent per share, from earnings. Consolidating New Jersey operations into the old AT&T headquarters in Basking Ridge cost $29 million, or 1 cent a share.
Excluding items, the latest results matched the mean estimate of 64 cents a share in a survey of analysts by Thomson Financial. Earnings in the fourth quarter of 2004 were also 64 cents a share, excluding gains from tax benefits and the sales of its Canadian directories business and a stake in a Canadian company.
Revenue was $19.3 billion, up 5.8 percent from $18.3 billion in the fourth quarter of 2004.
Verizon Wireless, owned in partnership with Vodafone Group PLC, accounted for $8.7 billion of the revenue total, up 18.3 percent from the fourth quarter of 2004.
The wireless venture added a net 2 million wireless subscribers in the quarter, up 20.5 percent over the fourth quarter of 2004. It ended the year with 51.3 million subscribers, just short of Cingular Wireless LLC's 54.1 million subscribers.
Verizon Wireless' average monthly service revenue was $49.36 per customer, down 1.9 percent from a year ago. Analysts had expected the number to decline due to price cuts and the popularity of family plans.
Another wireless competitor, T-Mobile USA Inc., said Thursday it added 1.4 million subscribers in the fourth quarter, for a total of 21.7 million. T-Mobile USA is a unit of Germany's Deutsche Telekom AG.
Verizon's landline business continued to decline. It served 49 million lines at the end of the year, down 6.7 percent from 52.3 million the year before. However, average revenue per customer rose 3.9 percent to $51.50 due to the demand for extra services.
The company has started replacing the copper wires leading into homes with fiber-optic cables. The fiber network is now available to 3 million homes and businesses.
Verizon has also started to sell video programming over fiber optics, competing with cable companies, but that rollout has been slowed down by the need to obtain permission from local authorities. Earlier this week, Verizon started selling its FiOS (fiber optic offerings) TV service in two towns in New York and Massachusetts, adding to the areas served in Texas, Florida and Virginia.
Verizon said 21 percent of households eligible for video service in the Dallas suburb of Keller had signed up, four months after the service launched.